Legal Question in Bankruptcy in Illinois

Bankruptcy & 401K/IRA accounts

Husband will declare bankruptcy from failed business venture. Spouse has significant assets in 401k plan. Can spouse roll assets into IRA and take distributions or will those assets be exposed to creditors? ILLINOIS is state of residence and business domicile.


Asked on 4/19/00, 6:00 pm

1 Answer from Attorneys
Charles Dobra Charles Wm. Dobra, Ltd.

Re: Bankruptcy & 401K/IRA accounts

Your question is more than a bit nebulous. Is the husband going to file on behalf of the company (what kind of entity? Sub S, LLC?, etc.?) AND file personally? Be aware of personal liability when bankrupting companies and perhaps creating a personal liability. If you are asking how to hide assets, I could not do that. In Illinois, IRAs and pension plans are 100% exempt. Your attempt to transfer funds into an existing fund, not your own, could very likely, create a voidable transfer as a preference.

Read more
Answered on 5/01/00, 4:02 pm


Related Questions & Answers

More Bankruptcy Law questions and answers in Illinois